Annual State of the NHSScotland Assets and Facilities Report for 2012

1.0 Introduction

1.1 Purpose

The "Annual State of NHSScotland Assets and Facilities Report for 2012" is the second year of a new national strategic report on asset and facilities management for the Scottish Government and NHS Boards' and Special NHS Boards' use. Its purpose is to annually review asset and facilities management performance, highlight areas of best practice, set target areas for improvement and monitor performance against the targets.

The report will form part of the Scottish Government's formal performance review and investment planning process. It will inform the annual reviews of the Local Delivery plans (LDPs) through review of capital planning and infrastructure investment proposals. NHS Boards will be asked to use the performance framework set out in the report to demonstrate that assets are used efficiently, safely and support health care improvement. It will form the basis for setting target areas for improvement to be monitored by Scottish Government in partnership with Boards throughout the year. It will guide Capital Investment Group (CIG) investment approval decisions along with the Boards' annually updated and approved Property and Asset Management Strategies (PAMS).

The main body of the report provides key information and performance analysis on the full range of assets and facilities services covered by the scope of the report. More detailed information and analysis is provided in the Annexes to the report.

1.2 Scope

The first report in 2011 focused primarily on NHSScotland property and estate issues, but indicated that from 2012 onwards the report will cover all NHSScotland owned and leased physical assets (property, vehicles, medical equipment, and IM&T). In addition, from 2012 the report will examine a range of facilities management services that are closely linked to asset ownership. This widening of the scope of the report is aimed at increasing the understanding of the opportunities for changing the balance of future investment between the different assets types. This is particularly important given the emerging landscape where care pathways are increasingly being developed to deliver care outside of hospital environments.

1.3 Policy

The strategic agenda for healthcare services in Scotland is set by The Healthcare Quality Strategy for NHSScotland. This is the overarching strategic context for the direction, development and delivery of all healthcare services for the years to come both in terms of securing improvement in the quality of healthcare services, and in achieving the necessary efficiencies.

The Asset Management Policy for NHSScotland [CEL 35 (2010)] establishes the policy environment and key performance indicators for asset management. It makes mandatory the use of the national asset management system to collect data and the requirement to submit annually updated asset management strategies to the Scottish Government. The policy establishes a robust framework against which the planning, delivery, management and disposal of property and other assets is undertaken and assessed. The policy seeks to establish asset management excellence in NHSScotland.

1.4 Context

The Scottish Government has produced a 'Strategic Narrative' around its vision for sustainable high quality in health. Entitled "Achieving Sustainable Quality in Scotland's Healthcare: A '20:20' Vision", the document emphasises prevention, integrated health and social care and self management. It also calls for more of a shift from acute care to community care where appropriate. This strategic narrative now provides the context for taking forward the implementation of the Quality Strategy, and the required actions to improve efficiency and achieve financial sustainability. Many of the actions required are urgent in order to respond to the immediate challenges (demography, Scotland's public health record and the economic environment) and the need to simultaneously protect and improve quality. Everyone involved in the delivery of healthcare in Scotland is now asked to play their part in turning the vision into a reality. Part of this vision is to have a healthcare system where there is integrated health and social care, a focus on prevention, anticipation and supported self management. The Scottish Government is currently consulting on its proposals to radically reform health and social care through the creation of Health and Social Care Partnerships. This provides an exciting context to re-examine the way in which assets are used to support service delivery. These proposals include changes to how adult health and social care services are planned and delivered, aiming towards a seamless experience from the perspective of the patient, service user or carer. Proportionally, fewer resources - money and staff - will be directed in future towards institutional care, and more resources will be directed towards community provision and capacity building. This will mean creating new and potentially different opportunities for the way in which the assets of the NHS and Local Authorities are jointly used to deliver services. Over the last 15 months NHS Highland and The Highland Council have been exploring the way forward on this work, examining improving access and service users experience whilst aiming to maintain long term effectiveness and efficiency of service delivery.

The Scottish Government's Quality strategy and the new Quality Outcomes on 'the best use of available resources' puts the spotlight on asset management improvement to support the delivery of high quality cost efficient healthcare. Ongoing financial constraints make it essential that existing assets are managed efficiently and that Boards have robust plans to ensure the assets are 'right sized' and that surplus assets are appropriately managed with any identified capital available from disposal being realised in an effective manner.

The three Quality Ambitions of patient centred, safe and effective described in NHSScotland's Quality Strategy, clarify the overarching principles that need to guide the further development and management of the NHSScotland asset base. These are summarised as follows.

• Integration of health, social and individualised care
• Health improvement and inequalities focus
• Large scale application of best practice
• Re-allocation of resources to target need and deprivation.

There can be little doubt that the above will have significant implications for NHSScotland assets and will drive change toward an overall more productive asset base that:

• Supports improved access and service user experience
• Provides accommodation and assets that are clinically suitable, effective and meet or exceed patient and staff expectations
• Minimises risk and promote safety for people who use our services, our staff and visitors and supports improved quality of healthcare
• Disinvests from assets with high operating costs, backlog maintenance requirements, or short remaining life where these do not meet future service requirements
• Seeks optimum solutions through co-location, integration and shared resources across service streams and with our partners in service delivery
• Improves property and asset performance on all key performance indicators
• Releases capital and revenue from the disposal of assets that are no longer required for current and future services to reinvest those proceeds for new developments
• Develops / procures flexible accommodation for locality based services
• Integrates services with other health and care facilities wherever possible and thereby improving inter-professional working
• Develops inherent flexibility in assets, to enhance responsiveness to service needs or activity adjustments, for both positive and negative variations
• Provides opportunities to rationalise the existing portfolio of buildings with the aim of reducing estate related ownership costs (energy, maintenance, capital charges etc) and avoiding the need for expenditure on backlog maintenance on buildings that are not fit for purpose.

1.5 Capital Planning and Prioritisation

After a lengthy period of significant growth NHSScotland's capital resources are under severe pressure over the Spending Review period 2011/12 to 2014/15. A total of £2 billion capital investment is available in the four years of the Spending Review and this will be supplemented by a further £750 million in revenue finance to be directed towards projects in NHSScotland whether as standalone Non Profit Distributing (NPD) projects or delivered via the hub initiative.

Given the scarcity of capital resources it is even more imperative that those capital resources available, and revenue applied to support those projects being taken forward using revenue finance, have maximum impact in providing quality health services and at the same time drive and facilitate increased productivity and efficiency in service provision. The overarching imperative is for decision making regarding investment and disinvestment to be driven by quality, not simply cost reduction. Boards' Property and Asset Management Strategies will need to clearly demonstrate the need for, and priority given to, any investment proposals and the opportunities that the investment provides to improve quality. In addition, the proposals should maximise the proceeds from disposal of surplus assets to support reinvestment in NHSScotland infrastructure including backlog reduction.

A new work-stream is being developed at the request of Scottish Government's Director of Finance, and in response to the 2011 State of the NHSScotland Estate Report findings. The remit of this work-stream is to:

• Develop prioritisation criteria and a draft list of investment priorities to inform planning and investment decisions by the Capital Planning Group and Capital Investment Group
• Develop medium to long term national investment and disposal plans based on information from the Boards' asset management plans and discussion with Boards
• Develop a strategic rationalisation and disposal model for operational and office accommodation

The work will consider a more formal approach to capital planning and prioritisation using a robust set of criteria to develop an affordable list of capital priorities which demonstrate measurable improvement in asset performance over time. It is anticipated that there will be a number of benefits from taking this approach. From a financial perspective it should be able to increase the effectiveness of investment and reduce the expenditure that is required to meet performance or increase the performance for the same level of expenditure. It will also provide a transparent decision making process and enable a focus on the best mix of investments to meet performance and risk within the constraints that NHSScotland operate under.

1.6 Capital Procurement

The Scottish Government and Health Facilities Scotland is currently procuring a new framework (Frameworks Scotland 2) for use by NHSScotland bodies to deliver cost and time efficiencies in the delivery of publicly funded health and social care projects across Scotland. The establishment of this framework is presently scheduled for early 2013.

Frameworks Scotland 2 will reflect a strategic and flexible partnering approach to the procurement of publicly funded construction work and complements other procurement initiatives for the delivery of health, social care and other facilities in Scotland. It is expected to have a project "pipeline" of approximately £110m per year.

Frameworks Scotland 2 will provide a route for the procurement of publicly funded construction, repair and maintenance projects in respect of health, social care and other facilities. It will sit alongside alternative procurement routes available, namely hub and NPD projects. The hub initiative is led by the Scottish Futures Trust on behalf of the Scottish Government and is being implemented across five geographical territories across Scotland. In each territory, the participating public bodies have joined with a private partner to form a new joint venture company known as a hubCo that will deliver a diverse pipeline of projects. Across Scotland the total value of projects is expected to be worth more than £1.4bn over the next ten years. Hub will typically be utilised for community services in particular primary care projects and health and social care projects involving multiple public sector organisations. NPD will be used to procure large projects which will be privately financed. The principal focus of the work under Frameworks Scotland 2 is anticipated to be around the acute sector, and will include both refurbishment and new build work along with programmes of backlog maintenance and risk reduction work. It is anticipated that the majority of the work will be projects or programmes of work with construction costs in excess of £1 million.

1.7 Information Quality

NHS Boards and Special NHS Boards are responsible for providing and maintaining information about the assets that they own and lease including ensuring that this information is accurate and up to date. They are supported and facilitated in this by Health Facilities Scotland and together they continually work to improve the quality of data so that it assists better quality analysis and performance monitoring. During the last couple of years NHS Boards have focused on updating and verifying their records on estate assets as part of the development and implementation of the new Estate and Assets Management System (EAMS). Similarly, information on energy and waste has been updated as part of an initiative to revise and update the Environmental Monitoring and Reporting Tool (eMART). This report makes extensive use of the information and data provided by Boards to the ISD Cost Book, EAMS and eMART. In addition, the report uses information specifically provided by Boards for this report using standardised information proforma.

Development of the first State of the Estate Report in 2011 identified a number of issues in relation to the general quality and consistency of information of different information sources. As a follow up to the 2011 report a review was undertaken and recommendations for improving the quality and consistency of information were made to the Assets and Facilities Management Programme Board and the ISD Cost Book User Group. These recommendations were accepted and changes are being implemented during 2012 which will inform the 2012 Cost Book, due to be published in November 2012. Since this report uses information from the 2011 Cost Book, issues remain regarding the quality of some of the information used to develop this report. In reality, given the extent and complexity of the NHSScotland asset base, improving information quality and consistency is likely to be an iterative and ongoing process for a number of years.

The widening of the scope of the report this year to cover vehicles, medical equipment and IM&T for the first time has identified further issues on information quality. The information systems for these assets are generally less well developed than those for property assets and in some cases Boards were unable to provide the information requested for this report. For equipment assets Boards should comply with the recommendations of the 2001 Audit Scotland report "Equipped to Care and" the 2004 follow up report. In addition, Boards should follow the guidance set out in Annex 3 of the "Policy for Property and Asset Management in NHSScotland (CEL35(2010). As the data gathering and analysis continues to improve in quality it is expected that more robust strategies for managing investment, risk and opportunities associated with these assets will emerge. This will allow more extensive analysis of comparative performance to be undertaken on Vehicles, Medical Equipment and IM&T for next year's report. However, it should be recognised that for this year's report the quality and consistency of data in relation to these assets limits the conclusions that can be drawn from the analysis.